Intuitive Surgical Misses Q4 Revenue, EPS Targets; Shares Drop Despite Strong Long-Term Outlook

Intuitive Surgical reported disappointing fourth-quarter results, with revenue of $1.32 billion, missing the $1.38 billion Wall Street consensus. Adjusted earnings per share came in at $4.97, below the $5.12 estimate. The shortfall was driven by a 5% decline in procedure volume growth, particularly in the U.S. market, where demand for robotic-assisted surgeries weakened during the holiday season. The company attributed the dip to temporary macroeconomic headwinds and delayed elective procedures, though it reiterated its full-year 2026 guidance of 10% to 13% revenue growth and continued expansion in international markets. Despite the long-term optimism, investor reaction was negative. The stock dropped 7.3% in after-hours trading, erasing gains from the prior week. Analysts noted that while Intuitive's core business remains structurally strong—with over 90% of its revenue derived from recurring service and instrument sales—the near-term miss triggered a reevaluation of near-term execution risks. The company’s current backlog of $1.4 billion and a 54% year-over-year increase in international procedure volumes were cited as positive signals, but not enough to offset concerns about softer demand. Market participants are now focusing on the company’s ability to maintain momentum in key geographies like Europe and Asia, where new installations are accelerating. Additionally, the $1.2 billion share buyback program announced in the quarter was viewed as a confidence signal, though it failed to stem the selloff. Investors remain cautious about the sustainability of growth given rising competition from Medtronic and Johnson & Johnson in the surgical robotics space.